How to Pay a Chinese Supplier Safely

Payment is where most first-time importers feel exposed, and reasonably so: you are sending money abroad before you have the goods. The good news is that the conventions are well established, and the genuinely risky patterns are easy to recognise once you know them.

What are normal payment terms?

For most China manufacturing orders the standard is 30 percent deposit, 70 percent balance before shipment. The deposit covers materials and reserves production capacity; the balance is paid once production is finished and, ideally, after you have seen inspection photos or an inspection report. Some suppliers ask 50/50 for small orders or for highly customised work where materials are bought specifically for you. Both are normal. What is not normal is a demand for 100 percent up front from a supplier you have never worked with.

Which payment methods should you use?

• Bank transfer (T/T) — the standard for production orders. Low fees, no dispute mechanism, so pair it with staged payments.
• Card or PayPal — higher fees, but a chargeback route. Best for samples and small first orders.
• Marketplace escrow (such as Alibaba Trade Assurance) — holds funds until you confirm; only applies to orders placed on that platform.
• Letter of credit — bank-backed and safe for large orders, but slow and paperwork-heavy. Rarely worth it below roughly five figures.

The scam that costs the most money

It is not a fake factory. It is an email that appears to come from your supplier saying their bank account has changed, please send the balance to this new account. The attacker has been reading the email thread — often after compromising one side’s mailbox — and steps in at the exact moment a payment is due. The email looks right because it continues a real conversation. The rule that defeats it: any change of bank details must be confirmed by voice with a contact you already know, on a number you already had. Never use a phone number supplied in the email announcing the change.

What should you check before the first payment?

• The beneficiary name matches the company name on the business licence and the proforma invoice.
• The payment is to a company account, not an individual. A personal account is a serious warning sign.
• You have a proforma invoice listing quantity, specification, unit price, total, Incoterm, and lead time.
• You have agreed in writing what happens if goods are defective or late.

How does paying for a sample work?

Samples are normally paid in full, because the supplier is doing bespoke work for a single unit. Many factories, including us, credit the sample fee toward your first bulk order, which makes it effectively a deposit rather than a cost. Paying for a sample by card or PayPal is worth the extra fee: it is a small amount, and it gives you a dispute route with a supplier you have not yet worked with.

How do you protect the balance payment?

Do not treat the balance as automatic. Before releasing it, ask for photos or video of the finished goods, and for orders of meaningful value consider a third-party inspection — an inspector visits the factory, checks against your specification and an agreed AQL standard, and sends a report. The inspection costs a few hundred dollars and is the cheapest insurance in importing, because after the balance is paid and the container sails, your leverage is gone.